PHILADELPHIA (Legal Newsline) - Weeks ahead of Super Bowl 50, the U.S. Court of Appeals for the Third Circuit ruled that a federal court was correct to dismiss a class action lawsuit filed against the National Football League for allegedly violating the New Jersey Consumer Fraud Act in selling Super Bowl tickets.
A three-judge panel of the Third Circuit, in its Jan. 14 opinion, affirmed the U.S. District Court for the District of New Jersey’s 2015 ruling, concluding that the plaintiffs lacked standing to sue in federal court.
“Many of us have felt the disappointment of wanting to attend a concert or athletic event only to discover that the event has sold out. When an artist or sports team is especially popular, the gap between the supply of tickets and the demand for those tickets can be enormous. Some people will be able to attend such an event; others will not,” Judge Julio Fuentes wrote for the panel.
“The Super Bowl is perhaps the ultimate example of an event where demand for tickets exceeds supply.”
According to plaintiffs Josh Finkelman and Ben Hoch-Parker’s complaint, filed in the federal court January 2014, every year the NFL prints “tens of thousands of Super Bowl tickets, yet it only allocates a meager one percent of these tickets for release to the general public through a lottery system, forcing all other fans into a secondary market for the tickets where they must pay substantially more than the ticket’s face value to attend one of the most popular and iconic sporting events of the year.”
The plaintiffs argued the profits from these secondary market sales are returned to the NFL and its franchisees in lucrative contracts with secondary ticket buyers who must purchase large blocks of tickets to regular season games of a franchise team to secure a small allotment of Super Bowl tickets.
They argued the secondary market buyer then enhances their profitability by packaging their tickets into expensive deals requiring the interested fan to purchase extras, such as multi-night minimum stay hotel rooms, pre-game parties and limousine services.
The practice of withholding all but one percent of its tickets to the general public constitutes a violation of the New Jersey Consumer Fraud Act, Finkelman and Hoch-Parker argued.
But the Third Circuit said the case came down to whether the plaintiffs had standing to bring the case in federal court -- not a ticket law that is “rarely litigated.”
“Our inquiry is more basic. Just as the realities of supply and demand mean that not everyone who wants to attend a popular event will be able to do so, federal courts, too, are not open to everyone who might want to litigate in them,” Fuentes explained in the 39-page ruling. “Our courts are courts of limited subject matter jurisdiction, empowered by Article III of the Constitution to hear only ‘cases’ and ‘controversies.’
“Over time, those words have come to signify certain minimum requirements that are necessary to establish constitutional standing. These requirements are unyielding. Plaintiffs who are able to establish them will be able to sue in federal courts; others will not.”
Neither Finkelman nor Hoch-Parker have constitutional standing to sue in federal court, the Third Circuit concluded.
“Were we to decide otherwise, anyone who purchased a Super Bowl ticket on the resale market would have standing to sue in federal court based on nothing more than conjectural assertions of causation and injury. Article III requires more,” Fuentes wrote.
On Dec. 30, 2013, Finkelman purchased two tickets to Super Bowl XLVIII for $2,000 per ticket, which was “far in excess” of the face value of the tickets, according to the lawsuit.
Hoch-Parker considered purchasing Super Bowl tickets, but ultimately decided not to because of the cost.
Bruce H. Nagel of Nagel Rice LLP, which represented the plaintiffs, said in filing the litigation that fans are “getting squeezed” by the NFL’s ticket sales policy.
From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.